As negotiations continue on the European Union’s next seven-year budget, important choices are being made about how social priorities will be funded and governed in the years ahead.
Proposals to simplify the EU’s funding architecture could significantly change how cohesion and social policies are delivered. These decisions will shape how Europe supports people into work, reduces inequality and strengthens trust in the European project.
Cities know from long experience what works. And they also know what is at risk.
At a recent Eurocities discussion with representatives from the EU institutions and city administrations, one message came through clearly: any reform of EU funding must preserve the strength, visibility and social focus of the European Social Fund (ESF), and must treat cities as genuine partners in designing and delivering solutions.
“The European Social Fund works because cities are directly involved,” said André Sobczak, Secretary General of Eurocities. “Weakening that role would risk undermining its impact.”
The European Social Fund delivers real results where people live
Over decades, the European Social Fund has had a visible, lasting impact in cities across Europe. It supports people into work, helps them gain new skills, and reaches those furthest from opportunity.
As Gabriele Bischoff , Member of the European Parliament, underlined, “The ESF has a visible impact in EU cities, from labour market inclusion and skills development, to housing‑first projects, youth employment and support for vulnerable groups.” These results are well known locally, even if “at EU level, sometimes we forget about social funds.”
The consequences of weaker social funding are clear. In Germany, around one third of projects today would not exist without ESF support. In Spain and Italy, that figure rises to around half. At the same time, inequalities are growing and labour shortages are increasing. “We want a real ESF, with real funds for people,” Bischoff said. “And we do not want social groups competing against each other.”
This evidence confirms what cities experience every day: social investment delivers concrete outcomes, and its absence would be quickly felt by residents.
Simplification must work on the ground, not just on paper
Cities broadly welcome efforts to reduce complexity and administrative burden. Simplification can help funding reach people faster and allow local authorities and partners to focus on results rather than procedures.
However, many participants warned that simplification should not come at the cost of clarity, accessibility or social purpose.
“Simplification can be positive if it reduces administrative burden and helps funding reach people faster,” Sobczak said. “But effective social policies depend on the meaningful involvement of cities in their design and delivery. A dedicated budget for the European Social Fund and clear earmarking for social inclusion and child poverty are essential to make sure support reaches those who need it most.”
The European Social Fund works because cities are directly involved. Weakening that role would risk undermining its impact
From the side of the European Commission, Ruth Paserman, Director for Funds: Programming and Implementation (DG EMPL), highlighted the challenges in the current EU budget, know as the Multiannual Financial Framework (MFF). “We have trouble identifying the borders between funds. Even administrators and beneficiaries don’t always know where to apply,” she explained. The intention behind reform is to create more synergies and flexibility, she explained, and to work in dialogue with member states.
Cities agree with the need for coherence, but they also see risks. As Michaela Kauer, Head of the Brussels Office of the City of Vienna, put it bluntly: “Simplification, yes, but for whom? Perhaps it is simpler for the Commission or for member states, but not necessarily for cities.”
When objectives become blurred and earmarking is removed, cities fear that social priorities could become harder to defend. Hans Verdonk, EU Representative in the City of Rotterdam highlighted how the size of national funding envelopes directly affects cities’ ability to respond to real needs. “The Netherlands has a relatively small envelope,” the city representative explained, “which means we have to make difficult choices.”
While the focus on targets is understood, Rotterdam warned that “targeted interventions may often add up to percentages, not to addressing real needs.” Tight implementation timelines further complicate delivery at local level, reducing the space for long‑term, strategic social investment.
Simplification must ultimately be judged by one criterion: does it help people and places deliver better social outcomes?
Partnership cannot be reduced to consultation
A central concern raised by cities is the growing trend towards centralisation through national funding plans. While flexibility for member states has its place, cities warned that it should not come at the expense of local involvement.
“From the European Parliament side, we know centralisation is not ideal,” said Gabriella Gerzsenyi, Member of the European Parliament. “Cities know best what’s needed locally, and they are in a better position to decide.”
Cities are where social policies are implemented. They understand local labour markets, demographic change and social challenges. Yet several participants highlighted that partnership is too often treated as a formal requirement rather than a genuine process.
We want a real ESF, with real funds for people
Marit Maij, Member of the European Parliament and rapporteur in the Committee on Employment and Social Affairs, was clear: “The European Parliament feels that the National Regional Partnership Plans go too far when it comes to flexibility and centralisation.” Cities, she stressed, “are where people are, where things happen on the streets, and where social lives are improved”.
For cities, partnership must mean meaningful involvement in the design of programmes, not only in their implementation. Without this, funding risks being misaligned with local realities.
City representatives stressed that they are not just implementers of decisions taken elsewhere, but essential partners in shaping effective social policies. Zagreb called for a dedicated chapter for cities in EU funding programmes, allowing them to co‑design policies that reflect local realities. As Luka Juroš, City Minister for Education, Sport and the Youth underlined, “if the EU wants to deliver a green and digital transition while responding to labour shortages and demographic change, cities need to be co‑drivers of this process.”
A dedicated European Social Fund still matters
A recurring message throughout the discussion was the need to preserve a strong, clearly defined ESF with a dedicated budget.
The ESF is not an infrastructure fund. It addresses complex social challenges that require continuity, trust and long‑term investment. As several speakers underlined, it supports priorities that go to the heart of the EU’s social commitments, including youth employment, child wellbeing, social inclusion and tackling homelessness.
“The EU is not only a market, but a community,” Gerzsenyi said. “A strong European Social Fund is a must.”
Removing earmarking risks weakening social objectives and increasing competition between vulnerable groups. Cities argued for restoring safeguards for social inclusion and child poverty to ensure resources reach those most in need.
Cities know best what’s needed locally, and they are in a better position to decide
Miguel Fernández Díez-Picazo, Labour-social attaché at the Permanent Representation of Spain to the European Union, warned that reforms could also reduce the visibility of the ESF, which in turn affects public trust. “Evaluations have shown that ESF gives good value for money,” he said. “It is essential for implementing the European Pillar of Social Rights.”
Anne Andersson, Managing Director for the Stockholm Region EU Office, underlined the unique role of the ESF in supporting local social action. “The ESF is the single most important contributor to social projects,” the city said.
She stressed that local authorities must be involved not only in implementation, but also in shaping the regulatory framework. “Cities are the first to feel social change and social challenges,” Andersson explained, arguing that long‑term flexibility and stronger collaboration are essential as challenges become more complex. “The social sector needs a specific status,” she added, warning that without this recognition, social priorities risk being diluted in a more generalised funding framework.
Lessons from cities: what happens when partnership fails
City representatives shared concrete examples of what happens when governance arrangements break down.
In Hungary, Budapest reported that no ESF calls had been launched for several years, with national authorities blocking payments. “This resulted in a major loss of funds,” Benedek Javor, Head of the Representation of Budapest to the EU, explained, “and it clearly shows the challenges cities face without proper safeguards.”
To deliver a green and digital transition while responding to labour shortages and demographic change, cities need to be co‑drivers
In Spain, despite a highly decentralised system, cities highlighted difficulties in allocating funds and the risk of political bias in national plans. Elsewhere, cities warned that smaller funding envelopes force difficult trade‑offs, often at the expense of long‑term social investment.
Across Europe, the message was the same: when systems become overly centralised or unclear, cities – and their residents – feel the impact first.
What cities are asking for in the next EU budget
Cities are not calling for the status quo. They recognise the need to modernise the EU budget and to improve coordination between funds. But reform must build on what already works.
Based on their shared experience, cities are calling for:
- A strong, dedicated European Social Fund with clear social objectives
- Mandatory and enforceable partnership with cities at all stages
- A formal role for cities in co‑designing social policies
- Long‑term flexibility that supports innovation without diluting purpose
- Clear safeguards to protect social investment and vulnerable groups
As Christophe Lafoux, Director for Inclusion and Employment in Lyon Metropole underlined, proximity is a guarantee of efficiency. Direct access to funding allows cities to innovate, respond quickly and deliver better results for people.
The next EU budget is an opportunity to strengthen the social dimension of the Union. Trusting cities as partners, and giving them the tools to deliver, will be essential to making that ambition a reality.
